Cadillac‘s “BookbyCadillac” premium automobile subscription service (we refer to as AaaS), sits comfortably between the traditional car ownership model and the pure rideshare model (Uber, Lyft, Waymo). Priced at $1,500/month (plus $500 initiation fee), we don’t believe that Cadillac’s bundled subscription service is a good value – flexibility and convenience come at a price. Listen to CEORater Podcast Ep. 102 to learn more.
In other news, Uber completed its tender offer to an investor group led by SoftBank. Listen to CEORater Podcast Ep. 103 to learn more.
The Wall Street Journal published Uber’s financials.
A bit of Simulation Theory, 1984, Minority Report and The Matrix. While autonomous vehicle technology is real – don’t believe the hype: Ep. 88: Autonomous Vehicles – Real Technology with A Dash of Hype:
Uber’s corporate governance – or lackthereof – is a hurdle in consumating a deal with Softbank. We are not fans of entrenched founders and out-sized voting stakes.
It would seem to us that Alphabet (tkr: GOOG) has a greater probability of bringing a functioning autonomous ride-hailing service to market at scale via its Waymo unit more quickly than Uber or Lyft given the strength of Alphabet’s balance sheet. We cover Uber – although primarily from a corporate governance standpoint – in multiple episodes of the CEORater Podcast, which you may access via Apple Podcasts and SoundCloud amongst other platforms. Here’s Ep. 62:
WSJ article: Toyota’s Talking Car Wants to Be Your Clingy BFF
Embedded voice-based intelligence/AI within the automobile – one more reason for Apple, Amazon, Google/Alphabet and Microsoft to insert/expand their footprint within the auto sector. Vehicles are feature-rich and lend themselves well to voice-based commands/ AIs. Each of Apple, Amazon, Google and Microsoft could readily (and in some cases do) open their respective AI platforms to auto OEMs for the purpose of embedding AI technology within the vehicle. The more strategic question however is whether “success” in this space necessitates that AAPL, AMZN, GOOG and MSFT own automobile operations. Google (via Waymo) and Apple are pushing forward. Will Amazon and Microsoft seek to “own” manufacturing in an effort to increase learnings in the auto sector? Other than autonomous vehicles, what will be the practical global reality 25-50 years forward regarding automobile ownership? Will today’s 20-somethings largely be ridesharers in 2050, or, will they own modular vehicles that may be customized like a mobile phone? The latter scenario would likely prove to be profitable for the automotive aftermarket sector to a degree it has yet to enjoy. Regardless of the practical reality AI will be deeply embedded in vehicles.